As the close of the calendar year quickly approaches, Chief Financial Officers (CFOs), controllers and valuation teams are holding preliminary discussions with auditors and making year-end preparations for the audit. 

Valuation of collateralized loan obligations (CLOs) and the accounting policies and procedures surrounding them has evolved over the last several years. Over that same time horizon, the CLO market has boomed, forcing those involved with valuation to achieve a deeper understanding of the risks of these structures and put firm valuation policies in place. This begs the question: What should you do and what policies should you put in place if you find that your fund has started investing in structured products, such as CLOs?

An emerging best practice includes a portfolio level analysis and deep dives prior to year-end on your most risky and material assets. In this updated guide, we share our view on best practices for performing valuation in the weeks leading up to year-end audits.

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